Victoria Krivogorsky

Country-specific institutional effects on ownership: concentration and performance of continental European firms

This paper examines the effect of country-specific institutional constructs on the relationship between ownership concentration and performance for firms in the eight Continental European countries of Austria, Belgium, Germany, Spain, France, Italy, the Netherlands and Portugal. Using data from publicly-traded firms owned by other companies (i.e., blocks), measures of the quality of investor and creditor protection and the effectiveness of legal institutions are applied. Employing a hierarchical moderated multiple regression analysis, differential validity is established for the relationship between ownership concentration and performance as measured by return on shareholders’ funds. This differential effect comes from creditor protection regimes and is consistent with a relational corporate governance model based on debt finance and concentrated ownership.

Dominant Owners and Financial Performance of Continental European Firms

We examine countries in continental Europe to further refine the distinction between ability to control and actual control and whether a particular distinct shareholder distribution relates to company performance. As an extension to the existing literature, we provide a more nuanced taxonomy of controlling shareholder systems in different countries. In particular, we (1) operationalize the definition of “dominant” owner, to make this measure less sensitive to the disparity of voting and cash flow rights and (2) empirically test the active power of the dominant owners by investigating whether the economic performance of the firms from different countries is consistently affected by the nature of the company’s dominant owner. After disaggregating the overall sample by specific ownership type and by country, we find statistical support for the relationship between dominant ownership and performance being strongly positive for firms in which banks and families/individuals are dominant owners to being inversely related (p ≤ 0.1) when corporations are the dominant owners. Additional analysis discloses an even more complicated picture, suggesting that countries are not homogenous in terms of their ownership landscapes, and, hence, their effects on performance.

Teaching an international course in the business school: A new blended approach

ABSTRACT This article showcases a course that is intended to address emerging educational needs related to the internationalisation of businesses. The course aims to cut across several functional areas (management, accounting, and general business) and pertains to issues confronted by managers while establishing business relationships outside their national borders. It utilises advanced educational methodologies and employs self-regulated learning along with several active learning strategies including interactive lectures, active review sessions, and ‘jigsaw’ discussions accompanied with extensive use of technology. It is designed to address how differences in international business practices can be translated into the future success (or failure) of a business partnership and to provide students with valuable insights as they prepare to be competent managers in a global business setting.

Institutional Passivity and "Shadow" Corporate Governance: European Evidence

This study seeks to extend the literature on how a Continental European firms performance is impacted by the second largest investor when its dominant owner has a capacity to control but is not actually involved in its management. Using data gathered from ORBIS for publicly-traded firms from Austria, Belgium, France, Germany, the Netherlands, Spain and Portugal, and controlling for firm size, industrial sector and country-specific factors, we find statistical support for a relationship between ownership of the second largest or shadow owner and performance for firms in which an institutional investor was the dominant owner. This statistical relationship varied in direction and significance depending on whether the shadow owner was a block (another corporation), bank or family/individual. The findings in this study represent first time evidence to explain the seemingly unrelated association between CE firm performance and ownership share when an institution is the largest owner. The findings also speak to investors about the importance of identifying the type of owner filling the control vacuum left by the institutional owner, and how for each of these ownership types, the share of the shadow owner now becomes the main link with firm performance.